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Numbers: Sales of newly built homes in the United States rose in January, even as mortgage rates rose.
The Commerce Department reported Monday that U.S. new home sales rose 1.5% to an annual rate of 661,000 in January, from 651,000 the previous month.
The number is seasonally adjusted and indicates the number of homes that would be built over an entire year if construction continued at the same pace each month.
The pace was below expectations on Wall Street. Economists had expected new home sales to total 680,000 in January.
Mortgage rates rose to a six-week high at the end of January, according to data from Freddie Mac, which may have put off some buyers.
Despite the increase in new home sales in January, activity remains well below the recent peak of more than 1 million in August 2020.
New home sales declined due to weakness in the south.
Data was revised from December. New home sales rose 7.2% in December, compared to an initial estimate of an 8% increase.
New home sales data is volatile from month to month and is often revised.
Key details: The median sales price of a new home sold in January rose to $420,700 from $413,200 the previous month.
The supply of new homes for sale was flat between December and January.
Most of the country reported an increase in newly built home sales, with the exception of a 15.6% decline in the South.
Overall, new home sales rose 1.8% compared to last year.
The Big Picture: The U.S. housing market continues to lag in the number of homes for sale compared to pent-up demand, so newly built homes could remain a bright spot as home builders add new inventory.
But with mortgage interest rates rising above 7%, that could dampen home buying demand, and some of that may already be showing in January's numbers.
However, builders have in the past deployed a range of incentives to boost sales, from lowering mortgage interest rates to lowering prices, which could offset the potential decline.
Market reaction: Against the backdrop of the increase in new home sales, most major construction company stocks such as DR Horton DHI,
lenar lynn,
and Toll Brothers Toll,
It rose in morning trading, along with the SPDR S&P Homebuilders exchange-traded fund XHB..
